The BCG matrix is used to prioritize products based on their market share and market growth. It categorizes products into four groups: Stars, Cash Cows, Dogs, and Question Marks. Stars have high market share and growth, requiring investment. Cash Cows have high share but low growth, generating cash. Question Marks have low share but high growth, requiring investment to potentially become Stars or Cash Cows. Dogs have low share and growth and do not warrant investment. The matrix assumes larger market share leads to profitability in growing markets and maintaining share requires investment. It helps assess products and allocate resources.